Increasing VAT remains one of the potential measures to increase budget revenues, considered within the framework of cooperation with the IMF (International Monetary Fund), but so far the Ukrainian government has no plans to do this. This unpopular decision was avoided in 2024, but the IMF's demand for a possible tax hike could resurface during upcoming negotiations.

Finance Minister Sergei Marchenko spoke about this in an interview with UT-2. In the fund’s mission last September, its representatives insisted on the need to raise the VAT rate as a condition for receiving the next tranche of financial assistance. According to Marchenko, the IMF considered the VAT increase as a “prior action” – that is, a mandatory precondition for further financial support for Ukraine. The memorandum between Ukraine and the fund noted that increasing the basic VAT rate is a potential source of additional budget revenues. However, the Ukrainian authorities understand all the risks of such a step, especially in war conditions, when the economic burden on business and citizens remains extremely high.. An increase in consumption tax could lead to:.

Marchenko said that the authorities made significant efforts to convince the IMF to abandon this requirement. Despite significant pressure from the fund, it was possible to reach a political agreement that at this stage the VAT rate will remain unchanged. “If the IMF had not abandoned this demand, we would have failed,” Marchenko emphasized, emphasizing that raising the VAT would be too painful a decision for the country in the current situation.

Although the VAT increase was avoided, the issue remains relevant.

The memorandum between Ukraine and the IMF noted that increasing the consumption tax is a possible source for filling the budget in the future. At the same time, the Ukrainian government understands all the risks associated with raising taxes and has no plans to do so yet.

Marchenko also noted that decisions to change tax rates always cause a serious public outcry and gave examples from other countries where tax increases led to political crises.

" “I am very grateful to the president that he supported our position and helped avoid a VAT increase,” the minister added..